Delhi High Court
Smt. Sanita Arora vs Union Of India & Others on 10 August, 2001
Equivalent citations: 94(2001)DLT120, 2001(60)DRJ607, 2001(78)ECC683, 2002(142)ELT554(DEL)
Author: D.K. Jain
Bench: Arijit Pasayat, D.K. Jain
ORDER D.K. Jain, J.
1. Rule D.B. The present case is a classic illustration where a person is made to run from pillar to post for over nine long years to get refund of the excess excise duty paid on the purchase of a car, required to be used solely as tax. To indicate and appreciate the petitioner's agony, it would be necessary to state the facts in a little greater detail.
2. The petitioner booked one Maruti Omni Van (taxi) by depositing a sum of Rs. 1,57,340, on 27th December, 1991 with M/s. Sikand & Co., respondent No. 4 herein (hereinafter referred to as 'the dealer'). The car was delivered on 29th February, 1992 along with an invoice for Rs. 1,20,348/- towards the price of the said vehicle. Since the petitioner had deposited a sum of Rs. 1,57,340/-, a sum of Rs. 36,92/-, towards excess excise duty recovered from the petitioner at the time of booking of the vehicle, was required to be refunded to her. The said amount became refundable on account of lesser rate of excise duty payable on a car registered fro use solely as a tax,for which some documents were required to be submitted by the manufacturer to the Excise authorities. Pursuant to a letter dated 26th March, 1992, received from the dealer, the petitioner claims to have submitted requisite documents. Since the petitioner did not receive any communication from the dealer or the manufacturer of the vehicle namely, M/s. Maruti Udyog Limited (for short 'Maruti'), respondent No. 3, herein, she wrote various letters to them for the refund of the excess excise duty deposited by her, but in vain.
3. Having failed to get any response from Maruti or the dealer, the petitioner filed a complaint with the Monopolies and Restricted trade Practices Commission (for short 'the Commission') praying for a direction to the dealer to refund the excise duty. On notice being issued by the Commission to the dealer, the dealer vide their letters dated 17th August, 1993 and 11th September, 1993, asked the petitioner to furnish certain additional documents to enable them to refund the excise duty. These were submitted on 18th September, 1993. In their reply to the notice issued by the Commission, the dealer stated that the petitioner was legally entitled to interest for the period from the date of deposit of money to the date of delivery, which it was prepared to pay. However, for some default on the part of the petitioner, her complaint before the Commission was dismissed for non-prosecution. However, in view of the undertaking given by the dealer before the Commission, a sum of Rs. 9,254/- was paid by the dealer to the petitioner by way of interest. But the excess amount of excise duty was not refunded. The petitioner's applications before the Commission for revival of the complaint were dismissed with the observation that she was free to take recourse to appropriate remedy before the appropriate forum. It may be relevant to note here that in its reply before the Commission, the dealer had stated that the requisite papers furnished by the petitioner were forwarded to the Excise authorities through Maruti and the excess excise duty would be refunded to her as and when the Excise authorities grant necessary approval for the same.
4. Having failed to receive any response to the letters written by the petitioner to the dealer as also Assistant Collector, Central Excise, Gurgaon, respondent No.2 herein, the petitioner issued legal notices to maruti and the dealer calling upon them to refund the amount of excise duty along with interest. In response to a legal notice respondent No.2, the Excise authorities, informed the petitioner that they had not received any excess amount of excise duty from Maruti or the dealer and, therefore, no question of any refund of the amount demanded by the petitioner in her legal notice arose. Being aggrieved, the petitioner filed the present petition.
5. In the affidavits filed in opposition, the petition is resisted by all the respondents on the common plea that in compliance with requirement of notification No. 162/86-CE dated 1st March, 1986, the petitioner failed to furnish/submit the required documents and a such the excess amount of duty charged was deposited by Maruti in the account of Excise department on 20th July, 1992. Excise department (Respondent No.2) resists the petition also on the plea that refund for the excess amount charged could be claimed within six months of payment and the claim is now barred by time. The dealer also claims that like Maruti, they are not amenable to writ jurisdiction being not a State within the meaning of Article 12 of the Constitution of India.
6. During the pendency of the petition, additional affidavits have been filed on behalf of the respondents. In the additional affidavit filed on behalf of the dealer it is now revealed that Maruti, vide letter dated 8th September, 1993, had informed the dealer about the Excise Department condoning the delay in submitting post-registration documents by the petitioner and 14 other persons and in response thereto the dealer, vide their letter dated 13th January, 1994 to Maruti, had pointed out that though they had already submitted registration and permit papers of the petitioner vide their letter dated 20th October, 1992, they were "once again" submitting the requisite documents. Similarly, the Excise authorities in their additional affidavit, departing from their earlier stand, have now admitted that consequent upon the grant of extension for submitting the documents, Maruti had in fact filed a common refund application dated 2nd September, 1993 in 27 cases, which included petitioner's claim for refund, but the claim was rejected not on merits but as barred by limitation under Section 11B of the Central Excise Act, 1944 (for short 'the Act'). Further, that on being remended by the Commission Central Excise (Appeals), in appeal filed by Maruti for de-novo consideration, the matter was re-adjudicated by the Assistant Commissioner, who vide his order dated 12th August, 1997, again disallowed the refund in question on the ground of non-submission of the documents. It is, thus, asserted that the said order has attained finality as neither the dealer nor the manufacturer (Maruti) has filed any appeal against the said order. Maruti's additional affidavit states that they have not received fresh adjudication order dated 12th August, 1997 and, therefore, there was no occasion for them to challenge the same.
7. We have heard learned counsel for the petitioner, Excise authorities, Maruti and the dealer, who have reiterated their respective stands taken in the affidavits. In nut-shell the ultimate position emerging is that none of the respondents now disputes that the petitioner was liable to pay Excise duty only at a concessional rate in terms of Notification NO. 162/86-CE and was entitled to the refund of excess amount paid. Though initially the Excise authorities had denied that excess duty had been deposited with them but now their stand does not seem to be so. All the respondents are now trying to shift the blame on the other for non-filing or delay in submission of documents. They have also now raised the plea of laches and non-maintainability of the present petition.
8. Notification No. 162/86-CE dated 1st March, 1986, insofar as it is relevant for the present case, reads as follows:
"Effective rates of duty for motor vehicle and parts thereof:In exercise of the powers conferred by sub-rule (1) of rule 8 of the Central Excise Rules, 1944, and in supersession of the notification of the government of India in the Ministry of Finance (Department of Revenue) No. 70/86-Central Excises, dated the 10th February, 1986, the Central Government hereby exempts the goods specified in column (3) of the Table hereto annexed and falling under heading Nos. of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), specified in the corresponding entry in column (2) of the said Table, from so much of the duty of excise leviable thereon which is specified in the said Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table, subject to the conditions, if nay, laid down in the corresponding entry in column (5) thereof.
87.03 Saloon 30% ADV :-
cars
(i) an officer not below the rank of an Assistant Collector of Central Excise (hereinafter referred to as the said officer) is satisfied that such salon cars are required for use solely as taxis; and
(ii) the manufacturer furnishes to the said officer a certificate from an officer authorised by the concerned State Transport Authority in this behalf within three months of the date of clearance of the saloon car by the manufacturer after payment of duty or such extended period as the said officer may allow, to the effect that each such saloon car has been registered for use solely as taxi."
(Emphasis added) The notification stipulates payment of concessional rate of duty on saloon cars required to e sued solely as taxi subject to the fulfillment of twin conditions, namely: (i) satisfaction of the concerned officer of the Central Excise Department that the car is required for use solely as a taxi and (ii) the manufacturer furnishing to the said officer, a certificate from an officer authorised by the concerned State Transport Authority in this behalf within three months of the date of clearance of the saloon car by the manufacturer after payment of duty or such extended period as the said officer may allow, to the effect that the car has been registered for use solely as taxi.
9. Undisputedly the notification is attracted in the present case. The only bar set up against the petitioner is non-submission of requisite documents within the stipulated time. The stand of the dealer, who is required to collect the documents from the buyer, is that the requisite documents were submitted by them with Maruti, who is required to send them to the Excise authorities, initially on 20th October, 1992 and again on 13th January, 1994, after the delay in submission of the post-registration documents had been condoned by the Central Excise authorities. We feel that in view of Asstt. Commissioner letter dated 13th August, 1993, extracted below, which did nt even specify the time for submission of documents, and the admitted position that a common application for refund accompanied by documents had been filed with Excise authorities by Maruti vide their letter dated 2nd September, 1993, no blame can now be attributed to the petitioner that the failed to submit the requisite documents.
To, M/s. Maruti Udyog Limited Palam Gurgaon Road Gurgaon.
D/Sirs Sub: Delay condensation for late submission of taxi papers.
The undersigned is pleased to extend the time limit in respect of the following vehicles as mentioned in column No. (i) is laid down of condition No. (ii) of Sl.No. 6 of Notification No. 162/86 dt. 1.3.86 as the documents have been seen and delay has occurred due to no fault of customer. The delay is hereby condoned to submit the documents to this office for necessary approval from the competent authority.
Column No. (i) Chasis No. Customers Name Dealers Name 897022 Smt. S. Arora M/s. Sikand & Co It is, thus, clear that in sofar as the petitioner is concerned, she had furnished the documents asked for. Could she thus be penalised for the defaults, if any, of the dealer or Maruti in not submitting them to the Excise authorities timely?. Obviously, the answer has to be in the negative.
10. Excess duty was undeniably charged by the dealer from the petitioner. The next question is with whom is the said amount, refundable in terms of the aforesaid notification, now lying-Whether with the Excise department or with Maruti, to whom the dealer had admittedly paid the entire amount collected from the petitioner. Each of them pints the accusing finger on the other.
11. In this context, it would be useful to refer to some correspondence exchanged between the Excise authorities and Maruti. It appears that some time in the year 1996, the Assistant Collector, Central Excise Gurgaon had issued a circular (CE-V(87)/30/70/E/92/9112) to Maruti directing them not to collect additional 30 per cent Excise duty fro the buyers directly or through its dealer, this being in clear contravention of Section 11B of the Act. Maruti was advised that any amount purportedly collected as duty of excise from the buyers should be deposited with the Central government. Simultaneously, in response to petitioner's legal notice on 27th August, 1996 the Assistant Commissioner informed the counsel for the petitioner that the excess amount of excise duty, collected from her had been retained by Maruti and they had not deposited the same with the Excise department. Therefore, they were not in a position to refund the said amount and Maruti was responsible to refund the excess amount so collected. No other reason for non-refund was indicated and the counsel was informed that the department had directed Maruti to do the needful as required under Section 11D of the Act. On the contrary, Maruti in their letter dated 3rd July, 1992, informed the Superintendent, Central Excise, Range-I, Gurgaon that the differential Excise duty in respect of the vehicles invoiced from 9th December, 1991 to 13th March, 1992 had been credited to their account vide PLA entry No. 94-A and particulars of all the vehicles, which included petitioner's vehicle, were furnished with the letter, received int he Excise Department on 17th August, 1992.
12. Admittedly, pursuant to Excise department's letter dated 13th August, 1993, common refund application in respect of the 27 vehicles, which included petitioner's vehicle, was filed by Maruti with the Excise Department on 2nd September, 1993. Therefore, stand of the Excise authorities, as communicated to petitioner's counsel,that Excise duty had not been deposited by Maruti with them,i, per se, not correct. This stand is belied by another un-controverter letter dated 21st October, 2000 written by Maruti to Excise Department, inter alia, saying that differential amount of Excise duty was debited in the dealer's account and credited to Central Excise Department vide PLA entry 94-A dated 30th July, 1992.
13. In the light of the aforenoted correspondence, we have no hesitation in rejecting the inconsistent and incorrect stand of the Excise Department about the deposit in their account the differential amount of duty viz., in excess of 30%. We are fortified in our view by the fact that no action seems to have been taken by the Excise Department against Maruti under Section 11D of the Act, which envisages that every person, who is liable to pay duty under the Act and has collected any amount in excess of the duty determined and paid on any excisable goods, shall forthwith pay the amount so collected to the credit of the Central Government. As noticed above, as far back as in the year 1996 Maruti was advised to comply with the said provisions. Even the two orders passed by the Assistant Collector on refund applications filed by Maruti clearly show that insofar as the petitioner and other like cases are concerned, their claim has been rejected only on the ground that they have failed to submit certain documents and not on the ground that they have not paid excess Excise duty. In this view of the matter, we are convinced that the excise duty collected from the petitioner had been credited to Excise department's account.
14. In the backdrop of these undisputed facts, the question that falls for consideration here is whether in exercise of writ jurisdiction the Excise Department should be directed to refund the excess amount of duty, recovered from the petitioner and credited to their account.
15. It is true that a petition under Article 226 of the Constitution of India, solely praying for issue of a writ of mandamus directing the State to refund the money alleged to have been illegally collected as tax is not ordinarily maintainable primarily for the reason that the normal remedy for such a claim is by way of a suit to enable the State to raise all possible defense to the claim, which, in most cases,cannot appropriately be considered in writ jurisdiction (See: Suganmal v. State of M.P. & Ors. ). But it is well settled that where no friable issue requiring investigation into facts is realised or where the claim for refund is by way of consequential relief or where a petition is for enforcement of a statutory obligation, this Court has ample powers to pass appropriate orders to render complete justice (See: M/s. Burmah Construction Company v. The State of Orissa & Ors. ; Shree Baidyanath Ayurved Bhavan Pvt. Ltd. v. State of Bihar & Ors )
16. Fiscal laws are to be construed strictly. There is no gain saying that the Excise authorities have no jurisdiction to levy excise duty except in conformity with and as empowered by the provisions of the Act and the rules made there under. Any duty collected otherwise is without authority of law and is liable to be refunded. The authorities have no right to retain the excess duty which is refundable and refusal to refund the same would be unlawful, which cannot be permitted.
17. In Salonah Tea Company Ltd. etc. v. Superintendent of Taxes, Nowgong & Ors. Etc. (1988) 33 ELT 249, the Apex Court observed that normally speaking in any society governed by rule of law, taxes should be paid by a citizen as soon as they are due in accordance with law. Equally, as a corollary of the said statement of law, it follows that taxes collected without the authority of law from a citizen should be refunded because no State has the right to retain the monies realised from the citizens which are otherwise not due from them.
18. Sub-sections 4 and 5 of Section 11D of the Act clearly provided that the amount paid to the credit of the Central Government shall be adjusted against the duty of excise payable by the person and where any surplus is left after the adjustment of the excise duty payable, the amount of such surplus has to be either credited to the fund or as the case may be, refunded to the person who has borne the incidence of such amount in accordance with the provisions of Section 11B of the Act. In the instant case, in terms of Notification 162/86-CE dated 1st March, 1986, the petitioner is liable to pay excise duty at 30% ADV whereas duty at the rate of 60% has been collected from her and, therefore, undisputedly there is surplus duty which is liable to be refunded to her.
19. We are of the considered view that it is a fit case where we should entertain the petition and issue appropriate directions. In view of the accepted position that the petitioner has in fact paid the excess amount of Excise duty and has furnished the documents, as demanded, it would be travesty of justice to relegate her now to a civil suit or to direct her to challenge the adjudication orders by the Assistant commissioner, Excise, particularly when she was not a party to the adjudication proceedings. The petitioner cannot be made to suffer on account of some confusion at respondents; ends. Admittedly, excess Excise duty had been charged from the petitioner; an application for refund of differential duty had been ade on her behalf by Maruti and requisite documents in terms of aforenoted notification had been submitted by her to the dealer who in turn claims to have forwarded the same to Maruti and Maruti has submitted the same to the Excise authorities. Under these circumstances, we feel that the Excise authorities have no jurisdiction to withhold the refund of excess Excise duty collected from the petitioner by raising technical objections to the maintainability of the writ petition. We would, therefore, direct respondent No.2/Excise authorities to verify its PLA account in the light of Maruti's aforementioned letters and process the case of the petitioner for refund of the differential excise duty, without being influenced by the adjudication orders passed by the Assistant Commissioner rejecting Maruti's consolidated application for refund. The exercise shall be completed within six weeks from today failing which respondent No.2 will be liable to pay interest to the petitioner @ 12% per annum from the date of credit of the excess amount in their account till the date of actual payment.
Accordingly the writ petition is allowed in the above terms and the rule is made absolute. The petitioner will be entitled to costs from respondent No.2, which we quantify at Rs. 10,000/-.